Wall Street

Wall Street to Move Up on Fed Support Package, European Equities Trade Positive

Fed Powell speech and US Jobless claims in focus. Fed support package announcement to keep market bulls supported. 

Summary: Global equities are maintaining an overall positive price activity this week, supported by multiple positive cues from across the globe. In European market hours today, major indices and key equities traded on positive notes over expectations of COVID-19 peaking soon and headlines hinting at EU finance ministers finally seeming to resolve some of their disagreements bringing them closer to the 500 Billion Euro economic support package.

Fed Support Package
Fed Support Package

Later in the day, news of US Federal Reserve’s 2.3 trillion USD support package aimed at strengthening local governments and small and mid-sized businesses greatly helped improve risk sentiment in the market. In the forex market, major global currencies traded positive against the USD on improved risk sentiment and wobbly USD’s strength due to the Fed support package announcement. 

Precious Metals: Rare metals are seeing price soar high despite improvement in risk sentiment. Firm USD did little to limit gains as Fed’s back to back support packages have greatly affected US bond Yields. The price of yellow metal scaled fresh multi-year highs today at $1690.53 during intra-day activity. 

Crude Oil: Crude oil price is trading flat with slight gains in major futures trading across the international market. Expectations of OPEC + members coming to an agreement on supply reduction measures during the videoconference meeting today keeps crude bulls underpinned in the short term.

DXY: The US Dollar index, which measures Greenback’s strength against six major global currencies, fell below the 100 mark once again as news of Fed’s latest support package worth $2.3 Trillion hit the market today. However, expectations of a further spike in jobless claims data today keep index above the 99 handle. 

On The Lookout: All attention is now on OPEC+ meeting and G20 energy ministers conference set to take place today and tomorrow. The OPEC+ meeting is expected to decide the initial supply cut measures. In contrast, the G20 summit tomorrow is expected to see energy ministers of member nations come to an agreement on critical issues and cut back requests from the cartel to other oil-producing nations.

On the economic calendar release front, the US calendar sees the release of initial jobless claims, PPI data, Michigan consumer expectation/sentiment/current conditions data and speech from Fed Chair Powell while the Canadian calendar sees the release of Employment change and unemployment rate.

Trading Perspective: Wall Street is likely to see major indices open and trade on a positive note, but gains are likely to be capped as jobless claims data is expected to see a sharp surge similar to last week. US futures trading in the international market saw positive price action of Fed support package cues. 

EUR/USD: The pair is trading with clear positive bias as the pair rides momentum gained from USD’s weakness. But Euro’s lack of fundamental strength kept gains capped at mid-1.09 handle where the pair is consolidating while awaiting Fed Powell speech and US data for short term profit opportunities. 

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